Outsourcing in a tailspin

Outsourcing and service providers remain wary of a rocky future today as the industry digests a damning report into the Federal Government's whole-of-government outsourcing strategy.

Released late Friday in an apparent attempt to minimise political impact, the report, authored by ASX managing director Richard Humphry, has slammed the $5 billion scheme as flawed.

The so-called Humphry report follows an Auditor Generals report last year which found Finance Minister John Fahey's outsourcing effort was running behind schedule and grossly over budget.

It now appears the continued review of the scheme will see changes to existing contracts with outsourcing, service providers and technology companies.

The Australian Financial Review, one of many print and online news sites to cover the story today, reports the stalled $1 billion Centrelink project will see contractor CSC Australia encounter a "rocky renewal process".

Meanwhile, The Australian reports that the Humphry report has forced the Government to abandon centralised control of the project, currently handled jointly by the Office of Asset Sales and Information Technology Outsourcing (OASITO) and Fahey's department.

With the OASITO to be phased out of existence, The Australian reports responsibility for the outsourcing program will now be assumed by Federal department and Government agency heads.

One IT services provider to comment this morning, Senteq's managing director Jonathon Fisk, said he is pleased with the recommendations for change.

"The way it was structured from the start favoured multinationals at the expense of Australian companies," he commented.

Meanwhile, another IT executive labelled the scheme as a "union-driven job protection environment".

"It's obvious there is a stack of fat that can be cut out of those environments," he said, commenting favourably on the Humphry reports findings.

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